Price Differences Within Retail Gasoline Markets

Abstract

This paper characterizes fueling stations' pricing strategies to study price variation within retail gasoline markets. We use a unique dataset with stations' locations and daily gasoline prices in the major cities of the continental U.S. to classify cycler and non-cycler stations. We exploit station-level variability in pricing behavior within retail gasoline markets to show that cyclers charge about 4¢ lower gasoline prices than non-cyclers, on average. Additionally, we confirm an almost biweekly duration of the station-level cycling behavior. Finally, we provide evidence of consumer search to explain the intra-market pricing strategy heterogeneity.